Japan FSA Creates Standalone Crypto Division as Penalties Tighten

The reorganization comes alongside legislative changes that reclassify digital currencies as financial instruments under the Financial Instruments and Exchange Act. That brings crypto under rules comparable to conventional securities, including insider trading prohibitions. Some issuers must now file annual disclosure reports.

Penalties for unregistered operations get significantly tougher. Maximum prison terms jump from three years to 10 years once the revised law takes effect. Fines rise to 10 million yen from 3 million yen.

Separately, Japan is drafting a 20% tax rate for crypto profits with a three-year loss carryforward, though the projected implementation date is 2028. The FSA is also examining whether to allow domestic Bitcoin ETFs, reviewing investment trust regulations needed to authorize regulated digital asset vehicles.

Bitget said it will restrict Japanese user accounts effective November 1, with full position closures by December 31, as international platforms adjust to the tighter framework.